Research On The Impacts Of "Province-managing-county" Reform On The Supply Of Primary Compulsory Education

The classic theory of decentralization holds that local governments have a better understanding of the preferences of residents,so decentralization is beneficial to the supply of basic public goods.However,from the real situation in China,decentralization not only failed to promote the supply of basic public goods by the grassroots government effectively,but also caused a shortage supply of basic public goods including compulsory education in a period of time.Scholars have attributed this phenomenon to the local government’s fiscal expenditure bias in the "promotion tournament" under the "Chinese-style" fiscal decentralization.It is undeniable that the "promotion tournament" among local government officials does have a negative impact on the supply of basic public goods,but this is not the only factor.The fiscal expenditure bias of local government can only impact the willingness of local governments to supply.But,in addition to the willingness to supply,the supply capacity of local governments is also a factor that can determine the supply of public goods,and most decentralization reforms will affect both the supply capacity and supply willingness of local governments.This article considers the reform of the "Province-Managing-County" that began in the 1990 s as a decentralization reform.It attempts to study the impacts of this decentralization reform on the supply of compulsory education in primary schools and explore the transmission mechanism.First,this article clarifies the concept of " Province-Managing-County" reform,and defines the concept of "Province-Managing-County" reform as a narrow concept of "Province-ManagingCounty" financial system reform,which is the "province governing county" and "expanding counties’ power" in two aspects.Secondly,this article believes that the impact of the "Province-Managing-County" reform on the supply of compulsory primary education schools depends on two transmission paths through theoretical analysis and derivation.The first is the impact of the reform on the fiscal expenditure bias(supply willingness),the second is the impact of reform on horizontal fiscal competition and vertical fiscal competition(supply capacity)of grassroots governments.In order to prove the above points,this article takes Shandong and Sichuan provinces as samples and uses the DID method to evaluate the effect of the reform.The results show that whether it is "province governing county" or "expanding counties’ power" policy,the reform of compulsory education has had an adverse effect in compulsory primary education supply level.Further analysis shows that the reform has weakened the vertical fiscal competition between higher-level governments and grass-roots governments,and is conducive to alleviate the "financial funnel" problem.But at the same time,the reform has also strengthened horizontal fiscal competition among local governments and reduced local government tax efforts.Efforts are not conducive to the raising of local government tax revenue.Overall,the reform has negatively impacted on the total fiscal revenue of local governments.In addition,this article also finds that the negative impact of the reform on the supply of compulsory education in primary schools is getting smaller and smaller with the improvement of the level of economic development,which indicates that the reform is likely to widen the gap of the supply of compulsory education in primary schools in counties.Based on the above points,this article puts forward several suggestions in terms of combining decentralization incentives and control of power control at the county level and carrying out decentralization reforms in accordance with local conditions in order to provide corresponding references for future government implementation of decentralization reforms.